The rate charged by commercial banks for the purchase of any foreign currency (in Canadian dollars)on any given day would be based on which of the following?

Question

Quizplus · Accepted Answer

The rate charged by commercial banks for the purchase of any foreign currency on any given day is based on the spot rate, which is the current exchange rate at the time of the transaction. The foreign currency hedge and forward exchange contract are financial instruments used to mitigate the risks of exchange rate fluctuations, while the forward contract is a contract to exchange currencies at a fixed rate at a future date. However, none of these directly determine the exchange rate on a given day.

The Rate Charged by Commercial Banks for the Purchase of Any